Job Order Costing 模板.pptVIP

Interestingly, Instead of starting your own business from scratch, perhaps you think it makes more sense to purchase a franchise. Initial investment varies, and annual franchise fees range from about $20,000 up to $80,000. The nearby chart of some well-known franchises shows the investment you typically need to make for these franchises. As you can see, you have to generate considerable revenue to cover the investment and related franchise fees. That’s a lot of overhead. Suppose that you decide to start a landscape business. You use an old pickup truck that you’ve fully paid for. You store the truck and other equipment in your parents’ barn, and you store trees and shrubs on their land. Your parents will not charge you for the use of these facilities for the first two years, but beginning in the third year they will charge a reasonable rent. Your mother helps you by answering phone calls and providing customers with information. She doesn’t charge you for this service, but she plans on doing it for only your first two years in business. In pricing your services, should you include charges for the truck, the barn, the land, and your mother’s services when calculating your product cost? In pricing your services, should you include charges for the truck, the barn, the land, and your mother’s services when calculating your product cost? YES: If you don’t include charges for these costs, your costs are understated and your profitability is overstated. NO: At this point you are not actually incurring costs related to the